Forensic Audit: The need to investigate accounting fraud by past IVGID management

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On August 24, 2023, the IVGID Board of Trustees voted to perform a forensic audit on IVGID’s accounting and financial reporting. A request for proposal to seek a qualified CPA firm to perform a scope of work is in process.  It is estimated that the costs could be as high as $150,000.  This audit has been prompted by a continued need to adjust prior period financials, outside auditors concerns about material weaknesses in internal controls, resistance to accept Audit Committee recommendations by management and some Trustees, and false statements made by management in the Representations Letters provided annually to the … Continue reading →

OPINION: Cooking the Books – Part 2

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On October 20, 2023, we obtained audited financial statements back to Fiscal Year 1990 for the Incline Village General Improvement District. Analyzing the data, we can now state that the fraud explained in Cooking the Books (Part 1) has been ongoing since 1990, and likely before that time. In that article, we explained that IVGID had improperly capitalized costs as LAND, and that this scheme is one of the ten most common fraud schemes involving financial statements. We analyzed data from audited financial statements CAFR/ACFR 2009 to 2022. With the older CAFRs obtained (1990 – 2007: links at end of … Continue reading →

OPINION-Is  IVGID management investing cash correctly?

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At June 30, 2022, the District had $49,947,779 in cash, yet according to the audited financial statements, the investment of the cash lost $110,920.  How is that possible? Almost  $15 million is in checking accounts and probably earn no interest.  But what about the other $35 million? Here is the breakdown: 1) Certificate of Deposits of $1.4 million with maturities spread equally between 2025 and 2027. 2) Government Agency Securities of $3.4 million with maturities spread equally between 2023 to 2026. 3) US Government Money Markets funds of $14.7 million have maturities of one year or less but the yield … Continue reading →

COMMENTS from Sara Schmitz about the recall

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by Sara Schmitz   Reasons NOT to Recall   Sara voted √    To protect property rights and ensure our beaches aren’t vulnerable to lawsuits; √     Spearheaded the robust Audit Committee where she’s been working to have accurate financial reports; √     Initiated the effort to create and use contract templates and was tasked by the board to review contracts to protect the District; √     Voted to approve the anonymous whistleblower process after 2 years of delay and; √     Voted to begin the effluent pipeline project after years of delay.   She has NOT and does NOT … Continue reading →

OPINION: Cooking the Books – Land misstated by IVGID for over a decade

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Organizations “cook the books” when they use accounting schemes and tricks to falsify their financial statements (i.e., their books) to make their results appear better than they actually are. One of the ten most common schemes: “Improper capitalization of expenses occurs when a company capitalizes current costs that do not benefit future periods. By doing so, a company will understate its expenses in the period and overstate net income. The most well-known example of this scheme involved WorldCom, in which the company overstated its net income by more than $9 billion by, among other accounting tricks, improperly capitalizing operating expenses.” (National … Continue reading →

The HUNT for a reason to recall Trustee Matt Dent

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The recall crowd  has provided false statements as reasons  for Matt Dent’s recall.   The facts are simple. 1)  As a chairman of the Board of Trustees the  only  designated is to prepare an agenda.  Controlling other Trustees is not the job. [link: Trustee Handbook] 2)   Employees leave for a variety of reasons.  To pin employee lack of retention on Trustee Dent  is false and the recall group cannot back it up with evidence. 3)  A loan on his residence is not required to be disclosed  to the state. [see graphic]  No teeth in this allegation. 4) There was no evaluation … Continue reading →

Nevada Globe Article on Recall of Two IVGID Trustees

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Only registered voters who actually voted in the election in which the subject of the recall was elected may sign a petition to recall, per NRS 306.020(3). In Nevada Hearings April 2019, Senator James Ohrenschall said, “Duplicate signatures, signatures of those not living in the appropriate district or voting in the previous election, and even fake or forged signatures have all been reported.” Of an initial  preliminary list obtained of 1500 petition signer names, the Village Alliance found a substantial number of names that were not voters in the 2020 election, as well as some duplicates. Some of those names … Continue reading →

Deficient contract raises false claims concerns (fraud)

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In April, 2023, the Incline Village General Improvement District signed a contract with Granite Construction for a phase (GMP1)  of the effluent pipeline project. Examination of the contract shows it lacks a key detail: the Construction Manager’s Fee as a percentage. The contract is based on the “Construction Manager at Risk” contract provided by the Associated General Contractors of America.   Use of such standard construction contracts is a best practice. A standard construction contract is an example contract for construction services published by a professional associations or standards body. But a standard contract does not mean that legal counsel has … Continue reading →

OPINION: A Recall puts all Incline Village/Crystal Bay assets up for grabs

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by Paul Smith Perhaps you remember Incline Village and Crystal Bay before it became a community of mini-hotels and party houses? Well, that change came because your local realtor, business operators, and STR (short-term rental) folks supported Washoe County in approving licenses and then not enforcing STRs regulations. Make no mistake; STRs are uniformly ruining the quality of neighborhoods and creating an ecological disaster for Lake Tahoe – all in the name of “more tourists equals more profit”. Starting with the introduction of County licensed STRs (short-term rentals of less than 28 days) in 2020-21, the Incline Village/Crystal Bay living … Continue reading →

IVGID’s Financial Meltdown: Part 1

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From 2016-2022, IVGID purchased over $53 million of “capital assets”, account 8120.  These expenditures, include vehicles, off-road vehicles (snowmobiles, utility carts, etc.), heavy equipment (Caterpillar front-loaders,  backhoe, etc.), equipment (golf course mowers, spreaders, forklift, etc) tools (chainsaws, etc) and other items, as infrastructure projects. These expenditures push up rates and fees; the golf courses have millions of dollars of equipment. If Fixed Assets are not properly managed, rates and fees are higher than they should be.    In May, 2023,  public records requests were made to examine IVGID’s Fixed Assets List, year ending 2019. In examining the Fixed Asset List[1] … Continue reading →